After a long career at Barron's, I joined Forbes as San Francisco bureau chief in December 2010. I've been writing about technology and investing for more than 25 years. With the Tech Trade, I've picked up where I left off when I was writing the Tech Trader Daily blog at Barrons.com. When I'm not working, you can find me riding my road bike around the Bay Area hills, managing my fantasy baseball team, rooting for my beloved Phillies and Eagles and hanging out in the Valley with my family. You can follow me on Facebook, on Twitter (@savitz), and on Google+.

EA Spikes; Report South Korea's Nexon Makes Takeover Bid

Electronic Arts shares are trading higher Thursday morning on a report that apparently originated with a South Korean newspaper that said the South Korean online game company Nexon has made a bid for EA.

Not a lot to go on here just yet, but EA shares are responding strongly to the rumor: the game maker’s shares have spiked $1.22, or 8.1%, to $16.23. The stock lately has been trading close to a 52-week low, as it continues to struggle through a transition to switch more of its business to digital distribution and away from the traditional shrink-wrapped console game market.

EA has a market cap of about $5 billion.

Update: In the May 2012 issue of Forbes Asia, my colleague John Koppischwrote a story about Nexon founder Kim Jung-Ju, who it turns out is now South Korea’s third-richest person; a year ago he was No. 9 on the list. He got a boost this year from Nexon’s December IPO in Tokyo. The story notes that Nexon expects revenue this year to be up 25% to $1.4 billion, with profits expected to rise 53% to almost $500 million. As the piece notes, Nexon was founded in 1994 as a provider of free online games.

The story notes that Nexon’s most famous game is Kart Rider, and that the company’s current top games are MapleStory and Dungeon & Fighter.

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Nexon is not a Japanese game company. Nexon is a South Korean company found in Seoul, Korea. Many of my friends work for Nexon headquarter in Seoul and if you know about video game industry, Japan has never been good at online game. Most of good online game companies are from South Korea and America.

I sense biased statement above. Japan is good at MMOs as well (FFXI). But does it matter who’s better at Online Gaming? That’s totally irrelevant to the topic. Is this really true? Nexon does not have the capital to buy out EA…perhaps purchasing licenses to several of EA’s games sounds more sense than buying out EA.

No, not quite. Nexon moved their main operating office from Seoul to Tokyo not too long ago. Since then, the branch in Tokyo has been at the base of the company’s operations. There is still a base in Seoul that serves as a development branch, but the main corporate office is currently in Tokyo.

Eric, great news bite. I don’t think this will go anywhere, but EA stock has tanked in the last few years (even though I truly believe they are making smart decisions — higher quality, smaller # of franchises, SWTOR, Origin, etc.)

The Big 3 F2P game makers in Asia are very successful, but don’t get much visibility here in the States.

Please let me know if you ever need perspective/insight from a game industry vet on future stories.

John Riccitielo is single handedly killing the gaming industry, and if Nexon do buy out EA hopefully they will sack this idiot that has no prior experience in Gaming (nor do any of EAs board of directors apparently) prior to coming to run EA.

This is a man that would have developers create a game and then divide it up piecemeal to sell each piece at the full price of an ordinary retail game if he could get away with it.

The man’s business practices have been and will continue to be ruinous for the many talented developers and development houses under EA’s auspices. And it is starting to tell in EA’s share price tanking, and the company losing money.

But no doubt he will do a Crytek and blame piracy and an ungrateful thieving self-entitled consumer base for that instead of himself.